Environmental Balance

A methodological and standardized approach

Introduction: We are experiencing dangerous environmental global phenomena, many of them proved as triggered by the human activity and also, many of what, is coming from the industrial world. The following piece of work is about a proposal for enabling accountability for such issue within the business framework, from a specifically proposed methodological and standardized perspective. It is nothing really new but rather something about joining pieces from different places.

ISO 55000:2014 – 2.2 says ‘Asset management enables an organization to realize value from assets in the achievement of its organizational objectives’ and also then, in 2.4.1, ‘Asset management involves the balancing of costs, opportunities and risks against the desired performance of assets, to achieve the organizational objectives. The balancing might need to be considered over different timeframes’. So, it is clear that asset management (very particularly for asset intensive organizations) is about the achievement of the organizational objectives, through the assets.

However, not being a prescriptive standard, nothing is said about what such organizational objectives should be about. This looks good in principle since, each organization, should define their own objectives as per the particular business characteristics, needs, requirements, constraints and bias.

This may not be (for sure) the only one but, sustainability, pretty much looks like the key concept impacted by the recent predominating event over the 2020/21, the (covid-19) pandemic (taken as initial triggering point for this piece of work, then re-scoped to a more generic perspective). And sustainability, also pretty much looks like one of the organizational objectives that most of the asset intensive organizations should work for (just from the business perspective).

Many voices here and there anticipate that this may be just the beginning of an era of pandemics and, if we think about that just from the zoonotic perspective (https://www.unenvironment.org/news-and-stories/statements/preventing-next-pandemic-zoonotic-diseases-and-how-break-chain), it doesn’t look crazy. To similar conclusions has arrived the Fifth United Nations Environment Assembly (UNEA-5) (‘more than ever that human health and wellbeing are dependent upon nature and the solutions it provides, and we are aware that we shall face recurring risks of future pandemics if we maintain our current unsustainable patterns in our interactions with nature.’).

If this makes sense, connecting the dots, at the end of the day everything seems to be related to environmental care. That is, the advance of the human being over the former natural kingdom of animals (excluding us), is forcing them to get closer to human populations, dangerously increasing the chance of zoonotic diseases with potential to get into pandemics.

This is definitely not a new discussion. So, focusing on the demonstrated impact on business sustainability (worldwide and particularly for asset intensive organizations) and, as said, assuming such business sustainability to be a pretty common (high level expressed) organizational objective, probably, it looks like the environmental care should be an asset to be consistent, compulsory and demonstrably protected by the organizations, to leverage business sustainability as a (now prescriptive) key organizational objective to comply with.

Holistically integrating the concepts above, the (medium level expressed) proposal is to:

-??????? Share a methodological and standardized approach for specifically ensuring that every single environmental impact produced by the organization, is identified and properly compensated in time and shape, with the final idea of keeping not just a zero balance (zero impact) but rather a positive one instead (to return back to the environment, a little more than what has been taken, somehow, in a demonstrated manner).

-??????? In principle, the identification of the specific environmental impact associated to the business development, jointly with the specific causes, looks like something able to be managed by some sort of ‘biased’ HazOp methodology (let’s say ‘EnvOp’), where:

o?? The analysis Nodes should represent the specific business units, or lines, or activities, or whatever called, eventually producing some environmental impact.

o?? The Deviations (guide word + characteristic) should be adapted to the specific purpose (environmental impact) so, both the guide words and the characteristics lists should be adapted. The guide words should/could be changed to:

·??????? Changed

·??????? Reduced

·??????? Increased

And, the characteristics, to the specific environmental Key Ecological Attributes (KEAs), according to the scoped environmental categories.

Note: The mentioned KEAs, were taken from the whiter paper publicly available at https://conservationstandards.org/library-item/classification-of-key-ecological-attributes-and-stresses-of-biodiversity-schick-et-al-2019/. The image below (also taken from the mentioned white paper), summarizes the relevant ecological categories from an onion layers model perspective.

o?? The Causes should not be any more eventual conditions (with some associated frequency of occurrence) but rather continuous ones (all the time there), since we are rather talking about an impact continuously doing its job. The identification should allow the analysts to isolate and understand the nature of each single business aspect, with the potential to degrade the environment in some significant way.

o?? The Consequences should be described widely (the same as in the typical HazOp), for the Organization to fully understand the produced impact. The key question here could/should be, how exactly the (original or current) environmental conditions are or could be different from those ones, if we were not here at all.

The (original) HazOp related concept for the Unmitigated Risk should/could be changed to Unmitigated Impact, and also changing:

·??????? The original Probability axe (within a specifically calibrated Risk Matrix) to Time to Impact, setting therein the estimated time to make the Consequence (right as described) to be evident and/or significant.

·??????? The original Consequence axe (within the same Risk Matrix) to Impact, setting therein the estimated impact by category (the following item below).

·??????? The proposed impact categories could/should be set to (as per the KEAs):

o?? Energy input

o?? Lithosphere

o?? Atmosphere

o?? Hydrosphere

o?? Matter cycle-related processes

o?? Biomass

o?? Information

o?? Network

o?? Species specific key attributes

o?? Energy, matter and water efficiency of ecosystems

o?? Resilience and resistance.

A color coding is initially proposed at the Risk Matrix representation below (iso-risk zones), as well as the associated concept (the tolerance criterion).

o?? The Safeguards should be specific Mitigating Actions (MA) to return back to the environment, a little more than what has been taken (the Consequences).

The (original) HazOp related concept for the Mitigated Risk should be changed to Mitigated Impact. The selected value therein should represent how the proposed Mitigating Actions are supposed to either reduce the Impact or delay the Time to Impact (considering that such last delayed Time to Impact, should be improving the chance for the human being to develop the technology to reduce the Impact which is, at the end of the day, the only thing that really matters).

Note: The numbers as well as the rest of the graphical characteristics in the matrix above, should be calibrated as per the particular application business.

The proposed approach tries to highlight the need of properly manage the produced impact on the environment, whatever the technology.

Just as an example, let’s take the solar one (technology) for power generation purposes, just to give a glance for this approach. Such technology uses to include (as physical devices), solar panels and batteries (just to name something among the rest of the required hardware). All these devices have associated asset life cycles.

From a Life Cycle Cost Analysis (LCCA) perspective, assessing the Net Present Value (NPV) for every single step in the life cycle, for the different scenarios under analysis, is a way to make comparable things of eventual pretty diverse nature (reducing everything to money).

In this case the proposed approach would be similar in terms of:

-??????? There is a time frame.

-??????? There are different scenarios to be compared.

To the previously given example, what if the environmental benefit for producing clean solar energy, is less than the damage produced due to the manufacturing of the relevant hardware components, within the relevant timeframe and considering both the components’ life cycles and the current available manufacturing and disposal technologies? (again, this is just an hypothetical example to illustrate the concept).

Now about time frame, there is no doubt that every human activity produces an impact. Part of it should be positive and part, could result negative. From this perspective, it looks relevant to understand whether:

-??????? The overall balance is positive on a reasonable time frame.

-??????? The eventual negative impact does not exceed a given limit, at any given time.

So, one very first relevant question here is what exactly a reasonable time frame means.

It may result relatively easy to understand that probably, most of the times the EnvOp Consequences could be a matter of long to very long term issues, probably (also), far beyond the business and/or the physical facilities expected lifetime. So seen, it is clear that we are rather talking here about social responsibility, ultimately about long to very long term sustainability (at the end of the day, beyond this planet, there is so far nowhere else to run). So the perspective should be, ‘Save the planet for the next generations’.

Now back to the reasonable timeframe, it could probably be defined somehow considering the expectancy for the human being to develop alternative technologies or manners to ‘enlarge the surface of the short sheet’ (let’s say, to find where else to run or, to have the technologies to properly reverse back the consequences of the produced undesired impact).

Now about scenarios, the proposed approach is about comparing basically two:

1.???? The one considering both the pros and cons but, including the environmental care activities (w/EnvOp Mitigating Actions).

2.???? The one considering both the pros and cons but, excluding the environmental care activities (wo/EnvOp Mitigating Actions).

The consideration of the pros and cons leads us to the very fundamental (and philosophical) question, about why we do what we do (generally speaking, why we study, research, work, build, do business, relax, etc).

If we accept that the fundamental engine is the wellbeing/wellness hunt (to feel good and better every single day, which is a pretty subjective concept for sure), it looks like some broadly accepted approach for wellbeing measurement should be selected for this purpose, in order to keep a standardized perspective.

There seems to be plenty of different approaches for wellbeing/wellness definition and determination but, a (probably) applicable one, could be the so called Genuine Progress Indicator (GPI) (that involves three relevant dimensions as per Social, Economic and Environmental, publicly available at https://gnhusa.org/genuine-progress-indicator/).

Each single aspect (the ones that apply, as per the nature of the evaluated thing) contributes either adding or subtracting.

All that said, the summary for the proposed approach is about:

-??????? Defining the time frame, the analysis period and the discount rate to apply (for NPV calculation purposes).

-??????? Identifying and describing the pros (eventually in the light of the GPI aspects).

-??????? Assigning economical value to each one of the identified pros, in term of money/time (ratio).

-??????? Mapping each one of the identified pros to the relevant GPI aspect.

-??????? Identifying and describing the cons (eventually in the light of both the GPI aspects, the EnvOp Deviations and EnvOp Consequences), both including and excluding the proposed EnvOp Mitigating Actions.

-??????? Assigning economical value to each one of the identified cons, in term of money/time (ratio), taking advantage of the impact determination previously done in the EnvOp analysis.

-??????? Mapping each one of the identified cons to the relevant GPI aspect.

-??????? Calculating the GPI for each one of the two scenarios where, the economic projections for the proposed time frame, would be also based on the NPV.

Now in terms of landing the proposed approach, an example was issued within a spreadsheet (containing both the EnvOp and the ELCCA sheets). Although, since it is not possible to share it herein, it could eventually by personal contact.

Conclusion: As told in the introduction herein, this is about a proposal for enabling accountability for the environmental impact management within the business framework, from a specific methodological and standardized approach. We definitely need to address many different things to properly manage the environmental issue in the long term and this, may be just another little contribution.